Leasehold Life is pleased to publish the following article, reproduced with kind permission of the Association of Leasehold Enfranchisement Practitioners (ALEP). Entitled 'Right of First Refusal: You Did Not Receive A Section 5 Notice' it explains what happens when the freehold is sold but you were not told and you now want to know whether the sale went through fairly.

Read more...

WILL 'FLAGSHIP' GREEN DEAL WORK FOR LEASEHOLD FLAT OWNERS, END FUEL POVERTY & CREATE JOBS?
November 2012

A landmark report published recently shows that the best way to boost growth and create jobs is to make the homes of the fuel poor super energy efficient.
The study, ‘Jobs, Growth and Warmer Homes’  commissioned by Consumer Focus was undertaken by Verco and the prestigious economic consultancy Cambridge Econometrics.

It shows that investing money raised through carbon taxes in an energy efficiency programme creates more jobs and growth than other kinds of major Government investment or tax cuts.
The FPRA who are members of The Energy Bill Revolution, the biggest fuel poverty alliance ever formed in the UK, is calling for carbon tax revenue to be recycled in this way who welcomed the publication of the report.

Ed Matthew, Campaign Director of the Energy Bill Revolution said:

“There is enough carbon tax to end fuel poverty and in time help make every UK home super energy efficient. This report shows that in its bid to boost UK economy, the Government is not investing in the one thing which could create more jobs and growth than anything else – re-building the UK’s housing stock. Not only does this have massive economic benefits but it is the most effective way to bring down energy bills. This should form the centre piece of a new Marshall Plan to re-build the UK economy.”

The research shows that significant Government energy efficiency infrastructure investment could:

1. Generate up to 71,000 jobs and boost GDP by 0.2 per cent by 2015 and create up to 130,000 jobs by 2027;
2. Lift up to 9 out of 10 households out of fuel poverty, reducing energy bills in all fuel poor homes by at least £200 per year.

Fuel poverty currently affects over 6m UK households, and levels are set to rise as energy prices go up. This is predicted to grow to 9.1m households – more than 1 in 3 homes. Energy consumers will pay over £2bn in carbon taxes from next year, rising to £4bn each year in carbon taxes by 2020.

From next year the main scheme to help fuel poor consumers will be the heating and insulation improvements provided by energy firms through the Energy Company Obligation (ECO). Government estimates show this will lift only 250,000 households out of fuel poverty but not likely to include those 2m living in leasehold blocks of flats due to complications with the lease.

FPRA Chairman and West Sussex County Councillor Bob Smytherman said:

"The Federation of Private Residents Associations (FPRA) are a non-political, not-for profit advice, support and lobbying organisation for our members who include private residential leaseholders, tenants' and residents' associations and residential management companies as well as those companies where the leaseholders together own the freehold of their own residential block and have long been concerned about the issue of energy efficiency for long- leaseholders living within blocks of flats, due to the complex nature of most leases."

"For very good reasons most leases don’t allow for ‘improvements’ to be carried out as part of the service charge but this means consensus for works to be done must be sought from residents and this can stall improvements before they have started".

"Research by our legal advisor Dr Nick Roberts, published last year in the New Law Journal proposed a few simple changes to existing leasehold regulations which would go some way to removing particular barriers, one of the biggest being co-ordination of all the flats in a block to reach a common consensus is considered one of the most difficult challenges in insulating blocks of flats, far more so than just funding".

"The 'Green Deal' and ECO will not on its own provide the much needed incentive for leaseholders to insulate their homes. To be cost-effective, such improvements which need to be carried out to a block as a whole would involve very complex arrangements and negotiations especially in mixed tenure developments and where there are a number of parties to the lease."

Flat owners need help in making their blocks more energy efficient. But the Government’s current policy – designed to do just that - isn’t likely to work for flat owners without providing incentives or changes being made to leasehold regulations.

NEW INDEPENDENT APPEALS SERVICE FOR MOTORISTS PARKING ON PRIVATE LAND
October 2012

In a major shake up of the private parking industry, the British Parking Association (BPA) has appointed London Councils to deliver a new, Independent Appeals Service (IAS) for motorists parking on private land.

The agreement, which has been reached following years of campaigning by the parking industry and months of planning, will provide an appeals service similar to that which is currently available to motorists who receive parking tickets on public land. Currently, if a motorist wants to challenge a parking charge received on private land, they must appeal to the parking company directly and if they still feel that the decision is unfair, they must challenge the charge in court.

From October 1st 2012, car parking operators who are members of the BPA’s Approved Operator Scheme, will be bound by the decision of an independent adjudicator who will review evidence submitted by both the motorist and the operator and determine whether the charge should stand or not.

Car parks managed by operators who are not members of an Accredited Trade Association will not be covered by the IAS.

The parking industry has agreed to meet the cost of the service so that it is completely free to the motorist. However, if the appeal adjudicator finds in favour of the parking operator, no early payment discounts will apply.   

Ignoring Flat Owners

The Federation of Private Residents' Associations (FPRA) which represents flat owners in England and Wales accused the Government of ignoring flat owners and tenants with the announcement of an outright ban on clamping cars on private land, as they believe it will cause major problems for ordinary residents living in blocks of flats with a parking space.

The Protection of Freedom Act 2012 which received Royal Assent earlier this year ignores all the issues we raised during the passage of this Bill regarding the car clamping ban and it will now be included in the Coalition's Act which comes into force on October 1st.

Government's Response

The Government's response to our concerns is that landowners can erect barriers around their property to control illegal parking. This might be fine for well-heeled companies, the landed gentry and government departments, but it displays a dismal ignorance of how this can be achieved in blocks of flats.

The FPRA pointed out to the Home Office that:

1. Residents and leaseholders of blocks of flats may not be able to install barriers because the terms of the lease will not allow them;
2. If the lease does allow or if it is amended to allow (a very complicated and costly process) the installation of barriers, the cost of installing and maintaining them will fall on the ordinary leaseholder, which includes pensioners and the not-so-well-off. Will the government contribute to this cost?
3. Barriers are restrictive and inconvenient to residents, visitors and trade vehicles interfering with the free movement in and out of where they live, work or visit.

Federation Chairman Bob Smytherman said:

"The Coalition Government's understanding of car clamping is depressingly naive as they seem to just think that it's a black and white issue of drivers as victims, when in fact victims are also residents whose lives are plagued by illegally parked cars".

"Ministers naively thinks 'landowners' can just erect barriers, having no understanding that 'landowners' also includes ordinary people - leaseholders - in blocks of
flats who could be forced to pay for the installation and management of barriers, if the lease allows it. And most likely the lease will not allow it, in which case there is little that those residents can do to effectively keep out unwanted cars".

"This new law will bring misery to a lot of people and certainly not the 'Freedom' the Government claim."

The FPRA argued that the real problem with the system was the rogue car clampers, and the solution should have been to regulate them, not ban the practice.

FPRA Chairman Bob Smytherman who represents leasehold flat owners on the BPA (AOS Board) added:

"Whilst we are very disappointed that the Government ignored our concerns about banning wheel clamping, we must comply with the law of the land and therefore we strongly recommend to leasehold flat owners that you cease wheel clamping on your land as soon as possible and instruct a BPA (Approved Operator) to manage your site to comply with the new Protection of Freedom Act 2012 and to benefit from the new Independent Appeals Service after 1st October. Not only must this scheme be totally independent of the operators but be seen to be independent too."

The FPRA will be attending a meeting later this month to learn more about the plans for exactly how the appeals process will work as these are still being finalised by London Councils, who will be delivering the service and once it is finalised, any tickets issued by members of the Approved Operator Scheme will clearly explain the motorist’s right to appeal, and how the process will work.

GAS SAFETY WEEK

September 2012

The Federation of Private Residents Associations has pledged its support for Gas Safety Week 2012 and is calling on the public to take care and be gas safe. To mark the week the FPRA will be advising members about gas safety issues on their web-site, their autumn member's newsletter out during the week and each day on their various social media sites.

Gas Safe Register, the official list of registered gas engineers, is launching the second annual Gas Safety Week from 10th – 16th September, aiming to raise awareness of gas safety in the home.

Paul Johnston, chief executive at Gas Safe Register said:

“Every year, far too many people suffer from preventable gas related accidents, such as gas leaks, explosions, fires and carbon monoxide poisoning. In the last year alone 18 people died and a further 399 were hospitalised".

"With Gas Safety Week we want to encourage the public to only use Gas Safe registered engineers to fit, fix and service their gas appliances and to raise awareness of the importance of having an annual gas safety check".

“If maintained and installed properly, gas appliances are safe. If neglected, gas appliances can kill. In Gas Safety Week we want everyone to find out when they last had all of their gas appliances, including cookers, fires and boilers, checked. If this was over a year ago, you should get them checked by a Gas Safe registered engineer as soon as possible to help ensure your family and home is safe.”

Bob Smytherman Chairman of the FPRA said:

“Gas Safety Week gives all flat owners and tenants the opportunity to put gas safety at the top of everyone’s priority list. Making sure gas appliances are safe to use could save your life. Alongside Gas Safe Register we want people to understand the real risks unsafe gas work poses and help people to stay gas safe as well as be prepared for the changes to the building regulations affecting home-owners, leaseholders, landlords and property managers at the end of the year."

Are Your Gas Inspection Hatches In Place?

The FPRA's Hon Legal Consultant Yashmin Mistry highlights below the need to get inspection hatches in place now ready for the new regulations.

The 31st December 2012 is a date all home-owners, leaseholders and landlords should have in their diaries. Why? Because if arrangements have not been made for inspection hatches to be installed and after this date, a gas engineer cannot view a boiler flue along its length, they will be entitled to advise the homeowner that the installation is “At Risk” and will seek permission to turn it off, leaving the property 'gas-less'. This requirement will clearly have an impact on landlords and leaseholders obligations alike.

Background

The introduction of fan-flued gas appliances in the mid-1990’s allowed gas central heating boilers to be installed away from external walls. This meant that in blocks of flats developers and/or builders were routing flues to boilers through ceiling voids and stud walls between the flats to make better use of space".

In 2007, CORGI issued the original Technical Bulletin (TB 200) which required new installations with a flue routed within a void to have appropriate means for gas engineers to visually check the flue. This was to be achieved by the installation of inspection hatches located in the ceiling".

The Health and Safety Executive (HSE) issued a safety notice in December 2010 which coincided with Gas Safe Register Technical Bulletin TB008.
The main change made to the original bulletin by the TB008 was to require inspection hatches to be fitted retrospectively to properties where the flue is concealed within a void and cannot be inspected.

Whose Responsibility Is It To Install Inspection Hatches?

The responsibility belongs to the homeowner. However, in certain circumstances it may that the homeowner will have recourse to other people/bodies. For example:

1. Where a property is less than 2 years old, a homeowner should contact the original developer and/or builder for assistance with retro-fitting inspection hatches and repairs of the flue defects. Failing that, the homeowner should be advised to contact their home warranty provider. The main warranty providers in the UK are NHBC, Premier Guarantee and Zurich Building Guarantee (for older properties).
2. Where a property is between 3 and 10 years old, the homeowner should contact the home warranty provider;
3. Where a property is 10 years or older a Registered Gas Safety Engineer should be contacted.   

How Will This Affect Landlords and Leaseholders?

In demised premises, one must first and foremost always consider the provisions of the Lease. Most inspection hatches will need to be installed into the ceilings of flats.  It is therefore important to identify which party under the lease the ceiling and ceiling void have been demised to and which party is responsible for maintenance of these parts.

Landlord’s Consent For Works Under the Lease

It is also usual for leases to include provisions within them requiring the leaseholder to obtain landlords and/or managing company’s consent prior to making alterations (structural or non-structural) within their demised premises.

From a landlord’s perspective, whilst consents cannot be unreasonably withheld, landlords may need to give consideration to several issues:

1. Whether they consider reducing their administration charges for providing consent as, arguably, all leaseholders must undertake the works to comply with legislation and statutory requirements; and
2. It is possible that the original plasterboard ceiling will have been designed to provide fire protection and, in many cases, acoustic/noise protection too. The hatches will of course need to be fitted to provide equivalent fire/noise protection to the ceiling they are replacing. It may be that the landlord considers appointing one contractor to install inspecting hatches within their developments to ensure consistency and a minimum standard of safety. 

On-going Maintenance Responsibilities

Another important thing to remember is responsibility for ongoing maintenance (if any). Which party to the lease will be responsible for the maintenance of the inspection hatch once installed?  It will arguably come down to the party responsible for the ceiling under the terms of the lease as it is highly unlikely that the lease as currently drafted will incorporate specific provisions for inspection hatches. Lease variations may also need to be considered in certain circumstances.

Health Warning!

Whilst there is no legal duty on homeowners to have inspection hatches installed, there is a long-standing legal duty for gas engineers to be able to visually inspect flues to ensure safety.  Getting the works completed may take time, especially if the homeowner needs to make contact with the original building and/or home warranty provider. To avoid the risk of having gas turned off from 1st January 2013, action must be taken now.

Landlords also need to start considering, (if they have not already done so), the policies they have to put in place for providing consent and ensuring a minimum standard of safety across their portfolios.

Whilst 31st December 2012 seems a long way off, time has a habit of flying when you are having fun!

18 people died from gas related incidents in the UK last year and 399 non-fatalities were reported (Source: HSE RIDGAS statistics 2010/11 (provisional)

SENIOR MP'S SUPPORT NEW LEASHOLD REPORT
August 2012

The Federation of Private Residents Associations (FPRA) has today welcomed the support given by senior MP's from all parties following the publication of the report 'New Lease of Life' by the 'Think Tank' Centre Forum.

This follows Conservative Peer Baroness Gardner of Parkes taking up the FPRA campaign calling on the Coalition Government to introduce a minimum standard for private sector property management for blocks of flats and protection for leaseholder's service charge monies.

In 2009 under the last Government the FPRA and a wide section of property professionals took part in a Department of Communities & Local Government (DCLG) task and finish group to look at the issue and the group reached the general consensus that some form of independent redress was required for long-leasehold home owners to raise the standard of the property management industry, sadly the current Housing Minister Grant Shapps ignored that call, and the report never saw the light of day.

FPRA Chairman Bob Smytherman said,

"Today's reports shines a light on the Coalition Government’s current policy to rely on self-regulation which has resulted in a very patchy level of service to us flat owners with the sector relying heavily on the vested interests of trade associations such as ARMA (Association of Residential Property Management) and the Royal Institute of Chartered Surveyors (RICS) who both tend to put the interests of their members before the flat owners that they are supposed to serve, equally there are some excellent property managers who see little or no value in being a member of a trade association choosing instead to concentrate on excellent customer service."

"The RICS Code of Practice is not only voluntary for property management companies it is virtually unheard of by most flat owners, equally there are around 50% of property managers who don't even belong to any trade association despite collecting and holding large amounts of service charge funds often amounting to millions of pounds and not covered by any code of practice or regulation."

"We believe the only way to get the 'rogues' out of the sector is to have a compulsory independent licensing scheme with a high minimum standard, along with severe penalties for breaches of those required standards. There are over 2 million flat owners who need proper protection from the loopholes in the present arrangements and we welcome Centre Forum's report and the intervention of my local MP Sir Peter Bottomley who described the leasehold sector as 'legal torture' following a recent LVT case in his Worthing West constituency".

"A major concern to us is the insurance commissions that many Freeholders & their Managing Agents make at the expense of flat owners who are usually required to pay for insurance of the structure of the building via the service charge", added Bob.

"Many freeholders and managing agents see this as a profit-making opportunity and the whole insurance market for blocks of flats is, as a result, distorted by the payment of excessively high commissions and quasi- commissions in various guises to brokers, intermediaries and others, often amounting to 30%, 40%, 50% or even higher percentages; thus, the premium charged to the flat owner is substantially higher than it should be."

"Although legislation requires that service charges, including insurance, must be 'reasonable' and if not, is referable to a Leasehold Valuation Tribunal; however, unlike other charges, such as maintenance, cleaning, etc. in the case of insurance, the protection afforded by the law is ineffective.'

FPRA Proposals

The FPRA have proposed to Government a similar regulation such as in the Life and Pension market so that unfair commissions are banned altogether to protect leasehold flat owners from inflated insurance premiums. We believe the earning capacity of legitimate and responsible insurance brokers and others would not be affected as transparent fees at a reasonable level could still be charged and fully visible to flat owners on their service charge account.

It is often claimed by some professionals that commissions are already transparent and this may well be the case with good property managers, however we are aware that this is not always the case for all flat owners as 'hidden' commissions are frequently paid direct to freeholders without the knowledge of the flat owner concerned.

Many property professionals' only disclose commissions on request as required by the RICS code and not automatically therefore the vast majority of flat owners would not even know of this abuse or their right to challenge it.

Another concern we have in the current unregulated system is for the majority of flat owners who are obliged to pay advance payments and contributions to sinking/reserve funds.

REPORT OVERVIEW

In this report CentreForum argues that the current system of leasehold tenure in which leasehold managing agents can operate without any form of regulation is 'not fit for purpose'. The report shows that problems with management are growing, with a significant rise in disputes over inflated service charges and the operations of connected companies. It goes on to recommend how the system can be improved to benefit leaseholders and freeholders alike.

The report argues that a light touch, independent regulator for leasehold managing agents is essential if Britain's 2.5 million leasehold properties are to be given sufficient protection.

Leaseholders need far greater protection. At present there is legal torture of vulnerable groups including elderly, frail people on limited incomes and often limited life expectancy. Regulation and reform are urgently required. Everyone committed to fair dealing will welcome CentreForum's proposals. Government and parliament must act.

Sir Peter Bottomley, Conservative MP for Worthing West said;

"Reform of the leasehold system is well overdue. Leaseholders with private and public sector freeholders must be given a greater say in how their homes are managed. I support CentreForum's report, which offers innovative solutions to improve life for leaseholders."

Rt Hon Simon Hughes, Liberal Democrat Deputy Leader and MP for Southwark and Bermondsey said;

"There is a real sense of growing momentum and cross party consensus on this issue. It is now time to revisit leasehold reform. These proposals would cost the government nothing and would at a stroke transform the lives of millions of leaseholders."

Barry Gardiner, Labour MP for Brent North said;

"I have seen relationships between leaseholders and the owners of their freehold that work well. But all too often I am shown instances where the balance of power in those relationships is dangerously out of kilter, delivering hopelessly poor value to leaseholders. I welcome CentreForum's report, which seeks to address this imbalance in the leasehold system."